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Everything is moving far faster than anyone expected; Bitcoin, after managing to register a daily close above the crucial $7,700 level, started faltering under that level just minutes ago, falling as low as $7,575 as the crash continues.
The drop in the leading cryptocurrency, which comes after a temporary relief rally to $7,950, comes as the stock market has entered a precarious territory in the after-markets due to fears of a greater outbreak of the coronavirus-caused disease COVID-19.
Indeed, after President Trump’s address, in which he revealed that he would be suspending all travel from Europe to the U.S. for a month, the futures for the S&P 500 (ES) and the Dow Jones (YM) started to fall. At the crash’s worse, they had dropped almost 5% since the daily close, nearing limit down for the session.
The fears of the coronavirus were rapidly exacerbated by news that the NBA will be suspending its season for the foreseeable future due to a player catching the virus, along with Tom Hanks announcing that he and his wife have been diagnosed with COVID-19 while traveling in Australia.
As can be seen in the chart above, the crash in the futures of the indices seems to have led Bitcoin lower, which has been a trend over the past few days; despite many stating that BTC is a form of digital gold, it continues to act as a risk-on asset.
Do Bitcoin Bulls Have Any Hope?
Per previous reports from NewsBTC, some think that Bitcoin’s outlook isn’t as bad as many online put it out to be.
Nik Yaremchuk of Adaptive Capital, who called Bitcoin’s retracement to $9,500 at the end of February, suggested that BTC is in the midst of a textbook bottoming pattern. Others echoed this, remarking how Bitcoin is likely to hold $7,700 due to the level’s importance to miners.
Yes, there is the bullish technical outlook. But, there remains the risk of the macro outlook getting worse, which is evident by the rapidly increasing number of cases around the world, especially in Europe and in Iran.
A further drop in the S&P 500 and other indices, which will likely coincide with a recession if it happens, will likely result in further losses for Bitcoin, analysts have said.
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